MUMBAI: India's family-run business conglomerates, which relied on their manufacturing abilities to create wealth, are diversifying into new-age businesses, riding on the growing preference to create value through knowledge-based products in an economy that is fast integrating with the global world.

The Piramals, Birlas, Mahindras - names synonymous with Indian business - have recently ventured into newer areas that promise to offer lucrative returns in the long run.

The Ashok Piramal Group, which runs one of India's oldest textile companies, has firmed up plans to branch out into education business. The Mumbai-based textiles-to-real-estate group, which was carved out of the original Piramal group, will set up schools that seek to address the growing needs of modern working couples.

The new venture, Piramal World School, will initially start 'weekly schools' that provide boarding education on week days, enabling working parents to take their children home during weekends. "We are planning to invest 400-500 crore over a period of five years. Our schools reflect the aspirations of the modern society," said Mahesh Gupta, group MD, Ashok Piramal Group.

Ajay Piramal, who sold his pharma manufacturing company to Abbott Laboratories last year, has recently bought US-based analytics company Decision Resources, indicating his appetite for knowledge-based businesses. "Look at companies like Apple and Facebook. They have created so much value. In a changing global society, knowledge-based companies are turning out to be value-creators," said Piramal.

His recent acquisition in the pharma research space is actually born out of India's emergence as a low-cost hub for pharma research. "We have several scientists available now. Here, the cost is lowest and speed is fast," he added.

The Aditya Birla Group, which owns manufacturing giants like Hindalco and Grasim, is also increasingly betting big on new-age businesses. The telecom-to-retail group has recently ventured into the media business by buying out 27.5% stake in New-Delhi-based Living Media Group, which owns the India Today magazine.

The buzz is that the group may look at widening its media platform. Its chairman Kumar Mangalam Birla had said that the group plans to give equal focus on asset-heavy, asset-light and knowledge-based industries to create a balanced portfolio. The business conglomerate's diversifications into telecom and retail were viewed as attempts to gradually reduce its dependence on manufacturing.

"Media business has given us an important space in the knowledge-based industry. This is the tip of the iceberg. We have big plans in the knowledge-space," said a person close to the group's strategy team.

Mahindra Partners, the in-house incubation firm of the $12.5-billion Mahindra Group, has been identifying new-age businesses. After researching for almost three years, Mahindra Partners had recently incubated Mahindra Solar to set up solar plants. The group also plans to venture into water treatment and water management.

Though the early signs of diversification were seen as an attempt to break the barrier of licence raj, family-businesses took advantage of the rising economic prospects in early 2000 to increasingly diversify into newer areas. Though the recession in 2008 had put paid to this trend, family-run conglomerates have now started acquiring assets to spread their wings, capitalising on lower valuations.

"In emerging India, family businesses are run by people with high entrepreneurial skills. They keep the industry-life cycle in mind and grab new opportunities," said Kavil Ramachandran, professor (family business and wealth management) Indian School of Business.

Ramachandran feels that emergence of younger family members to the top management has fuelled big thrust on diversifications. "Young people are always on the lookout for contemporary business," he said.